Financial Daily from THE HINDU group of publications
Tuesday, Dec 31, 2002
Financial Daily from THE HINDU group of publications Tuesday, Dec 31, 2002 |
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Agri-Biz & Commodities
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Agricultural Institutions Nabard offers co-finance for farm projects Our Bureau
BANGALORE, Dec. 30 THE National Bank of Agriculture and Rural Development (Nabard) has offered co-financing arrangements along with commercial banks for farm projects in Karnataka. The bank has indicated that among the projects where such co-financing arrangements could be worked out are export-oriented agriculture projects, projects involving large financial outlays, sunrise technologies and other national development projects. Nabard had indicated that it was willing to participate in the funding of such projects up to 50 per cent of the loan amount. This implied that the bank was prepared to share risk proportionately. The rates of interest also would be competitive and be fixed in consultation with the participating banks, Nabard said. Further, the bank had also indicated that the documentation, security and disbursement of funds would also be decided in consultation with the participating banks on a project-by-project basis. The projects identified for co-financing would be jointly appraised by Nabard and the participating banks. Nabard already has the expertise for appraisal of agriculture and rural development projects. For other projects, participating banks' expertise would be drawn and in exceptional cases, financiers would also be in a position to draw on the assistance of other financial institutions or other public sector enterprises. Besides, Nabard would also be associated with the periodic supervision of the project, though the primary responsibility would be vested with the participating banks. This was in view of the branch level presence of banks. The expenditure relating to supervision and legal charges would be shared between the financing institutions. So far, two banks have already signed memorandum of understanding with Nabard for such co-financing arrangements. These include Union Bank of India and Corporation Bank.
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